It occurs when the borrower speeds up the payment of the loan. This can be done by shortening the amortization period, increasing frequency of payments and increasing amount of money at each regular intervals
In an accelerator, a Seed investment is made in return for equity and usually between $15K - $50K. Startups are admitted in classes and work in groups. They are generally given a deadline to complete intensive training and iteration (typically 1 week to 6 months). Startups end an accelerator program with a Demo Day in which they pitch to investors.
The Accounting Standards for Private Enterprises (ASPE) are accounting principles for small and medium-sized enterprises (SMEs) in Canada that publish financial statements for general-purpose use but do not have to report their financial results publicly because their shares are not traded on a public stock exchange.
Accounts payable refers to the money a company owes its suppliers for goods and services that have been provided and for which the supplier has submitted an invoice. (This makes accounts payable different from accrued expenses, which do not have invoices to match.)
finance/accounting term; often referred to simply as "receivables" or "A/R"; amounts of money that a business is currently owed by customers but has yet to receive. Simply, A/R is how much money your customers currently owe you in the ordinary course of business
Accrued expenses are those incurred for which there is no invoice or other documentation. They are classified as current liabilities, meaning they have to be paid within a current 12-month period and appear on a company's balance sheet.
Accrued expenses are those incurred for which there is no invoice or other documentation. They are classified as current liabilities, meaning they have to be paid within a current 12-month period and appear on a company's balance sheet
The acid-test ratio compares a company's "quick assets" (cash and accounts receivable) to its current liabilities. It is one of six basic calculations used to determine short-term liquidity - the ability of a company to pay its bills as they come due. The acid-test ratio is considered the most stringent calculation of short-term liquidity. The formula for calculating it is: Quick assets (cash + accounts receivable) / current liabilities This determines how many dollars a business has available to pay each dollar of bills it owes. Ideally, a business should have an acid-test ratio of at least 1:1. A company with less than a 1:1 acid-test ratio will want to create more quick assets. It can do this by offering discounts to increase sales, collecting on accounts receivable (possibly offering special terms for early payment) or asking shareholders to invest more cash in the company.
One company's acquisition of another for the primary purpose of hiring its employees, rather than for the intrinsic value of the business itself.
Business acquisition is the process of acquiring a company to build on strengths or weaknesses of the acquiring company. A merger is similar to an acquisition but refers more strictly to combining all of the interests of both companies into a stronger single company. The end result is to grow the business in a quicker and more profitable manner than normal organic growth would allow
Add-on Services are the services provided by a venture capitalist that are not monetary in nature, such as helping to assemble a management team and helping to prepare the company for an IPO.
The activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media. Not to be confused with marketing or public relations. See AMIC.com for an extensive glossary of advertising terms
An advisory board is a group of people chosen to give expert and unbiased advice to a business. Members are not typically compensated. Advisory boards operate informally. They provide insight and guidance tailored to the specific needs of a business and serve as a sounding board for company leaders, helping validate their strategies and ideas. One of the main benefits of an advisory board is that it provides perspective and observations about strategic gaps and opportunities, with no self-interest on the part of the members.
Internal testing, of a pre-production model, typically on a controlled basis, with the objective of identifying functional deficiencies and design flaws.
Amortization expenses account for the cost of long-term assets (like computers and vehicles) over the lifetime of their use. Also called depreciation expenses, they appear on a company's income statement. When an amortization expense is charged to the income statement, the value of the long-term asset recorded on thebalance sheet is reduced by the same amount. This continues until the cost of the asset is fully expensed or the asset is sold or replaced. Canada Revenue Agency sets annual limits on how much of a long-term asset's cost can be amortized in a given year. These limits are called capital cost allowances.
The amortization period is the total length of time it takes a company to pay off a loan - usually months or years. If a company chooses a short amortization period, it will pay less interest overall but must make higher payments on the principal (the original amount of the loan before interest). A company that takes a longer amortization period will have lower monthly payments but pay more interest overall. The term "amortization period" should not be confused with amortization expenses. While both refer to financial changes over time, amortization expenses are the costs of long-term assets like computers and vehicles that a company accounts for over their lifetimes.
Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur's family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages.
An angel investor is a wealthy person who invests his or her own money in a company - usually a start-up - that is in the early stages of development. Angel investors expect to take ownership positions in the companies they support because their capital is unsecured - they have no claim on the company's assets. Their ownership may take the form of equity or convertible debt. They also tend to have clear exit strategies for ending involvement with the business. The goal of an angel investor is to help businesses get established. Their funding terms are often more favourable than those of other lenders. Many invest to support the entrepreneur behind the business, not just the business itself. Angel investors may provide a one-time injection of money into a business or invest on an ongoing basis in the company's fixed assets or working capital.
A formal estimate of the value of something on the open market. It also describes how the estimation and conclusion of value was made.
The term "assets" refers to everything a company owns. They are the economic resources it uses to increase sales, reduce costs or otherwise generate value for the owners. For example, buying computers and software for office workers can speed up daily tasks, increasing productivity. Two broad categories of assets appear on a company's balance sheet: Current assets used to generate value within the fiscal year Long-term assets (also known as fixed or capital assets) used to generate value beyond the next 12 months Reviewing a company's assets tells analysts and investors what management believes will generate the most value.
the total number of shares of stock that a company is legally allowed to issue under its articles of incorporation
Shares in companies based in mainland China that trade on either the Shanghai or Shenzhen stock exchanges. B-Shares are eligible for foreign investment provided the investment account is in the proper currency (Shanghai B-shares trade in U.S. dollars, while Shenzhen B-shares trade in Hong Kong dollars)
The back-end ratio, also known as the debt-to-income ratio, is a ratio that indicates what portion of a person's monthly income goes toward paying debts. Total monthly debt includes expenses such as mortgage payments (principal, interest, taxes and insurance), credit card payments, child support and other loan payments. Lenders use this ratio in conjunction with the front-end ratio to approve mortgages.Back-End Ratio = (total monthly debt expense / gross monthly income)*100
A balance sheet summarizes a company's assets, liabilities and shareholders' equity at a specific point in time (as indicated at the top of the statement). It is one of the fundamental documents that make up a company's financial statements. Accountants will indicate if the statement has been prepared according to the International Financial Reporting Standards
With a balloon payment loan, the final payment includes a large portion of the principal (the original amount borrowed). Balloon payment loans allow the borrower to negotiate how much principal will be paid at the end of the loan term. The two most common options are: The borrower repays some part of the principal along with interest (the lender's fee for the loan) on a monthly basis, and pays back the remaining balance of principal on the loan maturity date (i.e., when the loan is due). The borrower pays monthly instalments of interest only and then pays back all the principal when the loan is due. Balloon payment loans are good for companies that want flexible repayment options and predictable demands on their cash flow - as long as they're sure they will be able to make the final balloon payment. Often, the balloon payment ends up being refinanced on or before the maturity date, which means the old loan is settled and replaced with a new loan with a new maturity date.
A bank operating loan (also called a line of credit) is a short-term, flexible loan that a business can use as needed to borrow up to a pre-set amount of money. Bank operating loans are convenient for bridging gaps between the points when accounts payable are settled and accounts receivable are collected. A company must make monthly interest payments on any money it borrows through its bank operating loan, and can pay down the balance over time out of its cash flow.
Blended payments are a way of repaying a loan that sets equal monthly payments of principal and interest (blended) over an agreed-upon amortization period. By contrast, in a principal + interest arrangement, the borrower pays back the same amount of principal each month, plus a steadily decreasing interest payment. This means the total amount paid each month is not equal - it actually declines over the amortization period. With a blended payment loan the borrower will pay more total interest but get the advantage of predictable budgeting.
The break-even point is achieved when a company's total costs equal its total revenue. The break-even point is calculated by dividing the company's Indirect costs by its gross margin. Indirect costs are costs not directly associated with production. When sales are higher than the break-even point, the company has a profit; when sales are lower than the break-even point, there is a loss.
finance/accounting term; money. Specifically refers to funds contributed by investors or lenders to a company for the purpose of funding (capitalizing) the infrastructure and growth needs of the business.
Capital cost allowance (CCA) is the amount of amortization expense that the government will allow a company to deduct from its income for tax reporting purposes. The rules are clearly set by the Canada Revenue Agency (CRA) and must be strictly followed. Capital cost allowance accounts for the cost of long-term assets that generate benefits for shareholders over a number of years. It establishes the amount that can be expensed each year for different types of assets. For reporting to its business owners and financiers, the company does not have to use CCA. It has the discretion to choose from other methods like straight-line and/or declining balance to amortize its assets
finance/accounting term; a.k.a. cap structure; owners' equity plus long term debt; how a company is financed; shown on the assets side of the company's balance sheet. capital structure explained: A typical company's capital structure would include various pieces, or tranches, of debt and equity. The make-up of a capital structure is typically represented either in a capitalization table, where each instrument is laid out with the corresponding dollar amounts and owners, or is represented by ratios, such as the debt-to-equity ratio, or the debt-to-totalcapitalization ratio, or percentages (e.g., 30% debt/70% equity). A typical start-up company is financed primarily with equity, so that its capital structure is comprised nearly 100% of equity.
A captive finance company is a subsidiary whose purpose is to provide financing to customers buying the parent company's product. Captive finance companies can range in size from mid-sized entities to giant firms, depending on the size of the parent company. Their range of services can also vary widely, from basic card services to full-scale banking. A captive finance company can be a source of significant profits for the parent organization
: also referred contributed equity or invested equity, cash equity denotes the cumulative total of all cash invested in a company through equity (as opposed to debt, or borrowing) instruments over all of the company's financing rounds
finance/accounting term referring to the amount of cash that "flows" in and out of a business over a period of time. Cash flow means exactly what it sounds like: if your business is "cash flow negative," you are spending more cash in a given time period (typically per month or quarter) than you are taking in; conversely, if your business is "cash flow positive," you are taking in more cash than you are spending.
a term coined by Geoffrey A. Moore in his seminal work on marketing for technology startups, "Crossing the Chasm"; refers to the dramatic differences between the characteristics of and the ways a business markets to: a) on the one hand, the initial customers for a technology-based product or service, called innovators and early adopters; versus b) on the other hand, the bulk of the business's potential customers, referred to as pragmatists, or the early majority and late majority.
finance/accounting term; equity or stock ownership of a company representing owners who have the lowest-priority, or a "residual," interest in the company. In other words, in a liquidity event such as the sale of a company of all of its assets, common stockholders get paid last, only after the principal amounts owed senior debt-holders, subordinated debt-holders, and preferred stockholders are paid.
A form of Network Marketing in which the distributors are all also consumers, i.e., they must also buy the product for their personal use.
legal term for the terms of a contractual agreement or contract that restrict the actions of one party. Restrictive covenants are typically written into financing agreements, such as loan or bond documents.
Copyright is a form of protection for published and unpublished literary, scientific and artistic works that have been fixed in a tangible or material form. See WhatIsCopyright.org.
a legal form of business organization that shields its individual principals (shareholders) from personal liability. Two types of corporation are available to businesses, the "C" corporation, which is a taxable entity; and the "S" corporation (a form commonly used only by small, closely-held companies), which is a pass-through entity for tax purposes.
The annual interest rate paid on a bond, expressed as a percentage of the face value. It is also referred to as the "coupon rate," "coupon percent rate" and "nominal yield."
a term coined by Geoffrey A. Moore in his seminal work on marketing for technology startups, "Crossing the Chasm"; a phrase referring to the challenging strategic and marketing process by which technology startups transition from selling their products and/or services to innovators and early adopters to selling to the early majority, a.k.a. pragmatists; this transition ("crossing the chasm") entails a dramatic shift in mentality for the startup, best understood by reviewing Moore's book.
Darvas box theory is a trading strategy that was developed in 1956 by former ballroom dancer Nicolas Darvas. Darvas' trading technique involves buying into stocks that are trading at new highs. A Darvas box is created when the price of a stock rises above the previous high but falls back to a price not far from that high
Data analytics is the science of drawing insights from sources of raw information. Many of the techniques and process of data analytics have been automated into mechanical processes and algorithms that work over raw data for human consumption. Data analytics techniques can reveal trends and metrics that would otherwise be lost in the mass of information. This information can then be used to optimize processes to increase the overall efficiency of a business or system.
Data mining is a process used by companies to turn raw data into useful information. By using software to look for patterns in large batches of data, businesses can learn more about their customers and develop more effective marketing strategies as well as increase sales and decrease costs. Data mining depends on effective data collection and warehousing as well as computer processing.
A debenture is a marketable security (a type of investment) issued by a business or other organization to raise money for long-term activities and growth. It is a form of debt capital so it is accounted for as debt on the balance sheet of the issuing company. Bonds are similar, but unlike bonds, debentures are unsecured - i.e., investors have no claim to the assets of the company if default occurs. Because repayment is based solely on the creditworthiness of the issuing organization, debentures are typically issued by large corporations with triple A credit ratings. They are an effective way for corporations to use their privileged status to their advantage, borrowing money without security and few strings attached. A debenture is a legal certificate that says how much money the investor gave (principal), the interest rate to be paid and the schedule of payments. Investors usually receive their principal back when the debenture matures (i.e., at the end of its term).
finance/accounting term; the act of diluting; the reduction in proportional (percentage) ownership of each current shareholder of a company that results from the issuance of new shares. For the entrepreneur or startup manager, dilution refers to the extent to which your personal proportional ownership of your company declines when the company issues new shares, whether in the course of raising equity capital (by selling newly-issued shares to investors), or through stock option plans to motivate employees. Example: If you own 50% of ABC Company, a firm worth a total of $1 million (pre-money valuation), and ABC Co. then sells 500,000 newly-issued shares of stock at $1 each to a new investor (i.e., ABC raises $500,000 in equity capital from that investor), then post-investment, you would own 33.3% of ABC Co., now worth $1.5 million (post-money valuation). Note, in this example, that although you percentage ownership of ABC has declined, your stake maintains the same nominal value: i.e., your former ownership stake of 50% of $1 million = $500,000; while your new stake of 33.3% of $1.5 million = $500,000.
finance/accounting term; rate used to discount cash flows to determine the present value of future expected cash flows. In finance, it is accepted that $1 today is worth more than $1 tomorrow. A company's discount rate allows it to determine how much $1 tomorrow (or one year from now, or ten years from now) is worth today.
the act of distributing, or moving a business's goods (products) to market for ultimate sale to end-user customers. In some industries, distribution means the same as sales. (see also distribute and distribution channels)
The dividend payout ratio shows how much of a company's earnings after tax (EAT) are paid to shareholders. It is calculated by dividing dividends paid by earnings after tax and multiplying the result by 100. Dividend payments signal that a business is earning enough to share a portion of its gains with its owners, encouraging shareholder confidence in the management team. A company's dividend policy is set by the board of directors. It establishes the frequency and timing of payments. The amounts paid are determined by company results. No payments are mandatory until they have been declared by the board. Details of the dividend payment policy and history are usually included in the notes to the financial statements.
Companies pay dividends to shareholders in return for using their capital. Dividends are paid out of the company's earnings after tax (EAT). Dividends also help determine the value of a company's shares. They signal to shareholders that the business is earning enough to support growth and share a portion of the gains with its owners. This promotes shareholder confidence in the management team. In an incorporated company, dividends must be approved and declared by the board of directors. Shareholders are paid according to how many shares they own. Any earnings after tax that are not paid out as dividends are added to the retained earnings account on the balance sheet and can be used for ongoing operations or investment.
knowledge about a specific industry, technology and/or market, typically based on extensive experience in that industry or technology arena. Domain knowledge - which can take the form of technological expertise, understanding of product trends, familiarity with key industry players and influencers, and/or knowledge of industry-specific terminology and business practices - is a critical success factor for entrepreneurs and startup teams.
In a Multi-Level Marketing business, the collection of all people signed up underneath an individual on which the individual receives payment on their sales.
The inquiry process of obtaining sufficient and accurate disclosure of all material documents and other information which may influence the outcome of the transaction.
An approach to angel investing popularized by author Basil Peters, in which the goal of an investment is the sale of a company within a few years without requiring additional large investments from VCs, thereby providing high relative returns without requiring companies to be home runs
1> The key characteristic is market development. The business is focused on sales and marketing and proving business viability. 2>A state of a company that typically has completed its seed stage and has a founding or core senior management team, has proven its concept or completed its beta test, has minimal revenues, and no positive earnings or cash flows. 3>This term generally refers to a young enterprise that is three years old or younger. During this phase, a company is still in its novel stages of development. They could be in the process of experimenting with new products or services that they intend to market in the near future and/or may have viable products that are already available to the public.
An elevator pitch is a brief presentation, typically 30 - 60 seconds in duration, presenting the entrepreneur's concept / solution, business model, "go to market" strategy and value proposition to potential angel or venture capital investors, in order to obtain the attention of the investors, such that they are compelled to learn more about the opportunity
A person who organizes and operates a business or businesses, taking on greater than normal financial risks to do so. Entrepreneurs are the founders of startups and are the people angel investors support
Ownership in the capital of a Company. In corporations, it is called "stock"; in limited partnerships or LLCs, it is called "interests" or "units" This designation is given to a stockholder's ownership in a company. The amount of ownership is obtained when an individual or corporation purchases one or more shares of stock (equity shares). The more equity purchased, the greater the ownership.
A market where prices are manipulated and impacted by erroneous information, preventing the efficient negotiation of prices. These types of markets will often be marred by volatile swings because the true value of the market is clouded by the misinformation.
A business established and operated by its founders for the purpose of developing and maintaining a particular lifestyle or level of income. Such businesses typically have limited scalability because of issues such as limited access to capital, owner decisions relating to business operating models and staffing and reinvestment objectives. Many are sole practitioners or small groups like husband / wife teams. They are typically highly dependent on the experience, skills, drive and engagement of the owners
Refers to trust responsibility to make good investments that will earn a high rate of return
detailed financial statements, typically developed by a company's management, that represent the expected future financial results of a company; an important component of a company's business plan; a distilled version of financial projections should also appear in a company's executive summary and investor presentation . Different from pro forma financial statements, which represent expected future financial results after a specific, significant event, such as a fundraising round, or a merger or acquisition.
First stage capital is the money provided to entrepreneur who has a proven product, to start commercial production and marketing, not covering market expansion, de-risking, acquisition costs
An investment round in which the pre-money valuation of a startups' round is the same as its post-money valuation from the previous round
With a franchise, a company licences its processes, intellectual property (e.g., trademarks), trade secrets and proprietary knowledge to an entrepreneur for a one-time fee and ongoing annual royalties. An entrepreneur who buys a franchise is called a franchisee. The business that originally developed the products, services and proprietary knowledge being licenced is called the franchisor. Franchising is a popular way to start a business and is prominent in the food industry. It gives an entrepreneur access to a franchise brand, marketing and ready-made operational model.
General equilibrium theory, or Walrasian general equilibrium, attempts to explain the functioning of economic markets as a whole, rather than as individual phenomena. The theory was developed by the French economist Leon Walras. It stands in contrast with partial equilibrium theory, or Marshellian partial equilibrium, which only analyzes specific markets
General expenses are the costs a business incurs as part of its daily operations, separate from selling and administration expenses. Together, general, selling and administration (SG&A) expenses make up a company's operating expenses. Examples of general expenses include rent, utilities, postage, supplies and computer equipment. General expenses are categorized as indirect expenses on a company's income statement because they do not contribute directly to the making of a product or delivery of a service. They are fixed costs because they tend to remain stable even when production volumes change.
Global value chain refers to five interrelated activities, taking place in more than one country, that provide a company with opportunities to increase its competitive advantage by adding value to its products and services. Those activities are: Inbound logistics (buying, shipping and storing the raw materials used to create the product) Operations (using the raw materials to create the product) Outbound logistics (moving the completed product from the factory to the customer) Marketing and sales Service By taking a unique approach to any one of these areas, a company can maximize efficiency and differentiate itself in the marketplace. For example, more effective inbound logistics can keep costs down, while innovative marketing can help the company grow its customer base.
Globalization is a process of increasing social and economic integration among countries around the world. It involves greater cooperation between people, governments and companies to make international trade easier - for example, through treaties like free trade agreements. For businesses, globalization can mean moving production or service facilities - such as factories, warehouses or distribution centres - to countries with lower labour costs.
The gross profit margin ratio shows the percentage of sales revenue a company keeps after it covers all direct costs associated with running the business. It is one of five calculations used to measure profitability. The others are return on shareholders' equity, the net profit margin ratio, return on common equity and return on total assets. Gross profit margin is calculated by subtracting direct expenses from net revenue, dividing the result by net revenue and multiplying by 100%. (Net revenue - direct expenses) X 100% Net revenue = Gross profit margin ratio
Guerrilla marketing refers to unconventional approaches to promote products or services. Its purpose is to make an impression with potential customers by using creative and unexpected marketing tactics. Guerrilla marketing is often carried out in public places. For example, a clothing company might hire a person from its target audience to model its fashions and hand out flyers at a public event, showcasing the company's products to his or her peers. Any media channel may be used for a guerrilla marketing campaign if it grabs the attention of its audience and creates a buzz around the product, service or company. Guerrilla marketing can be an effective marketing strategy for some small and medium-sized businesses because it can help them stand out in a crowded marketplace dominated by big brand names. It can also be more cost-effective than traditional marketing campaigns.
The halo effect is a term used in marketing to explain the bias shown by customers toward certain products because of a favorable experience with other products made by the same manufacturer or maker. The halo effect is a concept driven by brand equity. The opposite of the halo effect is cannibalization.
The fifth and last stage of the Venture Value Chain. In the Harvest stage, the executives and/or board of directors of the business seek to provide the business's owners with a return on their investment by either seeking a liquidity event (i.e., and initial public offering or sale of the business) or otherwise producing cash returns by managing the business in such a way as to maximize profits and dividends.
Companies use hedging to minimize the impact of potentially negative financial events on their business - such as unexpected spikes in value of foreign currency or the price of the raw materials they use to make their products. For example, a coffee company depends on a regular, predictable supply of coffee beans. To protect itself against a possible increase in coffee bean prices, the company could enter into a futures contract that would allow it to buy beans at a specific price on a particular date. That contract is a hedge. If the price of coffee beans climbs above the price in the futures contract, the company will save money and the hedge will have paid off. If the price of beans falls, the company will lose money because it has to pay the contract price. The difference essentially becomes a "fee" the company has chosen to pay for the sake of price certainty. As this example shows: Hedging does not prevent a negative event from happening, it just lessens the blow. You need to pay for the benefit, whether you receive one or not. Sometimes you benefit from what you spent, sometimes you don't
A corporation that owns the securities of another, in most cases with voting control.
The amount of time an investor has held an investment. The period begins on the date of purchase and ends on the date of sale, and determines whether a gain or loss is considered short term or long term, for capital-gains-tax purposes
HS codes are developed by the World Customs Organization (WCO). They identify product categories and products with a standardized two- to six-digit nomenclature. The first two digits of the code indicate the product category. The next four to six digits indicate the subcategories the product fits into. These codes can be changed every five years by the WCO. Countries can add digits to identify products even more specifically, taking the code up to 10 digits. These additional country-specific codes can be changed at any time by the country using them. The eight- or 10-digit HS Code used by a country is called a "tariff line." Entrepreneurs preparing to export goods need to fill out Canadian exporting forms using the Canadian HS code for the export products. The country importing the goods might have a different classification (HS Code) for that same product in its tariff schedule. When a product is new and has not been assigned an HS code - or fits into multiple HS categories - exporters should contact the customs agency of the country they're exporting to and find out what code to use and what tariff applies.
The internal rate of return that a fund must achieve before its general partners or managers may receive an increased interest in the proceeds of the fund. Often, if the expected rate of return on an investment is below the hurdle rate, the project is not undertaken.
An import is a good, product or service brought into a country from another country. The person or company bringing the product into the country is the importer. The person or company shipping the product from abroad is the exporter. Tariffs are often charged on imported products. These are fees imposed by customs agencies. In Canada, moving goods from one province to another is not considered importing or exporting
Governments collect income tax on the profit earned by businesses in their territory - whether those businesses are corporations, partnerships or sole proprietorships. Businesses must complete a tax return each year to determine if they owe tax, how much they owe, or if they are entitled to a tax refund (which can happen if they have overpaid their taxes throughout the year). Businesses are legally required to pay any income tax they owe. They must also pay additional fees known as surcharges. While the basic federal tax rate is the same for all companies, provincial and territorial tax rates and surcharges vary. This means one business may pay less or more tax than another depending on where it is located. Tax rates also change over time. In Canada, federal income taxes are governed by the Income Tax Act. The rules around income tax can be complex, especially for companies that earn income in other countries. It is wise to hire an experienced professional accountant to help you steer through the tax laws and understand how they apply in different situations.
An organization established to support the development of startup companies with intermediate term access, (1 - 3 years) to facilities, (office and lab space), resources and development programs, potentially including mentoring. Incubators differ from accelerators in that the latter typically focus on acceleration of growth in a shorter defined period whereas the former is focused on the development of the company and its product over a longer time period
Indirect costs are the costs of running a business and going to market with a product or service - regardless of the volume manufactured and/or sold. In other words, they are not directly related to making a product or service, or buying a wholesale product to resell. (This distinguishes them from direct costs.) Indirect costs include a company's operating expenses (also called selling, general and administration expenses), and are usually closely managed by business owners. They do not fluctuate directly with manufacturing or purchase volumes so they are typically described as fixed or semi-variable in nature.
A company's inventory includes any finished units of product it is holding for sale, any unfinished units of products (works in process), and any raw materials it owns to manufacture goods. The total value of a company's inventory appears under assets on the balance sheet. Inventory is considered a current asset because businesses typically use it, convert it to cash and replenish it several times within a normal operating cycle (usually less than 12 months). However, inventory is less liquid than other current assets (for example, accounts receivable) because it is harder to convert into cash. To speed up the conversion of inventory to cash, companies can sell off products at a discount, prioritize the completion and sale of works in process, return raw materials to suppliers for credits or sell them to another company, usually at a discount.
Investment Bank is a financial intermediary that performs a variety of services which includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients
A company's balance sheet may show funds it has invested in other companies. Investments appear on a balance sheet in several ways: as common or preferred shares, mutual funds and notes payable. Sometimes they are made to put excess cash to work for short periods. Other times they are used more strategically over longer periods. For small businesses, short-term investments are typically placed in highly liquid money-market funds and/or in interest-bearing bank accounts. Longer term investments could entail the purchase of shares in a private business. These can be highly illiquid and could be made to have some control over an important relationship (for example., with a supplier or large customer). Investments held for one year or more appear as long-term assets on the balance sheet. Investments used to generate cash within the current operating period (within 12 months) appear as current assets and are called "treasury balances" or "marketable securities."
Intellectual property (IP) is anything created by human minds: Inventions, literary and artistic works, designs, symbols, names and images used in business, and more. As it can sometimes have even more value than tangible assets, it needs to be properly protected. In Canada, intellectual property can be registered for protection through the Canadian Intellectual Property Office (CIPO). There are several different types of protection available depending on the nature of the intellectual property. Patents cover new and useful inventions (product, composition, machine, process) or any new and useful improvement to an existing invention. Industrial designs are the visual features of shape, configuration, pattern or ornament, or any combination of these features applied to a finished article. Trademarks may be one or a combination of words, sounds or designs used to distinguish the goods or services of one person or organization from those of others.Copyright provides protection for literary, artistic, dramatic or musical works - including computer programs. Trade secrets refer to unregistered, but valuable, business information that has not been publicly revealed.
An initial public offering (IPO) refers to the first time a company sells shares publicly. It is a form of equity financing. An IPO is usually momentous for a company, often coming after years of borrowing money and attracting private investors. It is a step a company might want to take when it is healthy, growing and wants to increase that growth but can't raise enough money privately to do so. IPOs also offer a good opportunity for early private investors to exit by selling all or part of their shares.
The appearance of a graph showing the typical value progression of early stage investment portfolios. Values often drop soon after the initial investment during the startup and early stage period, but rebound significantly in later years after companies reach profitability.
The J-curve effect is a type of diagram where the curve falls at the outset and eventually rises to a point higher than the starting point, suggesting the letter J. While a J-curve can apply to data in a variety of fields, such as medicine and political science, the J-curve effect is most notable in both economics and private equity funds; after a certain policy or investment is made, an initial loss is followed by a significant gain.
The January effect is a seasonal increase in stock prices during the month of January. Analysts generally attribute this rally to an increase in buying, which follows the drop in price that typically happens in December when investors, engaging in tax-loss harvesting to offset realized capital gains, prompt a sell-off. Another possible explanation is that investors use year-end cash bonuses to purchase investments the following month.
In a joint venture, two or more companies join together to collaborate on a particular project. Through their collaboration, the companies share resources, profits, losses and expenses. The joint venture is a legal entity separate from the companies' other business interests. For example, if two companies form a joint venture to work on a housing development, their other projects and properties are not involved. Before proceeding with a joint venture, managers of participating companies should clearly define how their joint venture will work and what each will contribute. The structure of a joint venture can vary depending on the partners and the project and will have legal and tax implications.
A ratio that is used in the performance evaluation of an equity relative to its risk. The ratio examines the consistency of an equity's return over time. The data for the ratio is derived from a value added monthly index (VAMI), which tracks the progress of a $1,000 initial investment in the security being analyzed. Calculated as: K-Ratio = (Slope of LogVAMI Regression Line) / [(Standard error of the slope)*(number of periods in the LogVAMI)]
The Japanese word "kaizen" means "continuous improvement" and refers to a structured process for improving products, services and systems on a continuing basis. Kaizen touches every step of the production process and covers equipment, methods, materials and people. It is an organization-wide approach that involves every person in a company, from the owners and managers to employees and contractors. One of the fundamental ideas of kaizen is that even a small change in a single area can have a large, lasting impact on operational efficiency or customer satisfaction.
Kanban is a tool and scheduling system for managing interdependent manufacturing processes. Invented by the Toyota Motor Corporation, it helps production managers confirm they have the right "inputs" (materials, information, human resources, etc.) at the right time, and provides the information they need to manage production from start to finish. Kanban is important because it: Prevents overproduction Helps connect production processes Helps users track whether production is ahead of or behind schedule Contributes to the continuous improvement of inventory management There are two main types of Kanban: Production Kanban provides information about production processes Parts withdrawal Kanban provides information about inventory and supply chain management Kanban can be electronic or paper-based. Its name in Japanese means "sign" or "signboard."
One of the "Greeks," kappa is the ratio of the dollar price change of an option to a 1% change in the expected price volatility (also called implied volatility) of the underlying asset. Kappa tells investors how much an option's price will change for a given change in implied volatility, even if the actual price of the underlying stays the same. Kappa is higher the further away an option's expiration date is and falls as the expiration date approaches. Just as individual options each have a kappa, an options portfolio has a net kappa that is determined by adding up the kappas of each individual position
In hunting, the modified aim required to compensate for wind or target movement. Used herein to describe the process by which an investor must increase the percentage he needs today so that he will end up with a desired target percentage ownership in the future, after adjusting for future dilutive financing rounds
Professional management attracted by the founder to run the company. Key employees are typically retained with warrants and ownership of the company
Key success factors (also known as competitive emphasis or strategic posture) state the important elements required for a company to compete in its target markets. In effect, it articulates what the company must do, and do well, to achieve the goals outlined in its strategic plan. Examples would include agility, reliability, diversity and emotional connection with clients. Key success factors are one of three elements a company's management team must articulate as part of its strategic planning process, with the others being its strategic goals and its strategic scope. The decisions the management team makes about key success factors: Directly addresses competitive forces (factors in the marketplace that can reduce profits) Set direction for the behavioral expectations of the employees Inform the knowledge, skill and behavioural requirements for a company to succeed Provide the decision-making boundaries for execution plans, including organizational structure, sourcing,manufacturing, marketing and sales, tools, technologies, etc. Companies use the insights from their SWOT analysis to make these decisions. They are refreshed annually as part of the strategic planning process.
acronym for Keep It Simple, Stupid. A guiding philosophy widely used in organizations that aims to focus management attention on the core attributes of a product, service or task. Burdening products, services or tasks with unnecessary add-ons leads to unnecessary development delays and management challenges. (So, when you think of how cool your product might be with just one more bell or whistle, just KISS that idea goodbye.)
This is a company that is considered to be in its mature stages of development. Unlike early and expansion-stage companies, later-stage companies already have successful commercialized products and services that are publically available as well as a significant generated cash flow. Many venture capitalists tend to invest in mature companies since they are less risky, are already established, have proven to be a financial success
Doing more with less by employing 'lean thinking.' Lean manufacturing involves never ending efforts to eliminate or reduce 'muda' (Japanese for waste or any activity that consumes resources without adding value) in design, manufacturing, distribution, and customer service processes.
(LBO) A takeover of a company, using a combination of equity and borrowed funds. Generally, the target company's assets act as the collateral for the loans taken out by the acquiring group. The acquiring group then repays the loan from the cash flow of the acquired company. For example, a group of investors may borrow funds, using the assets of the company as collateral, in order to take over a company. Or the management of the company may use this vehicle as a means to regain control of the company by converting a company from public to private. In most LBOs, public shareholders receive a premium to the market price of the shares. (LBO) This is a type of aggressive business practice whereby investors or a larger corporation utilizes borrowed funds (junk bonds, traditional bank loans, etc.) or debt to finance its acquisition. The high debt-to-equity ratio enables the investors to "buyout" a smaller company with very little cash. Leveraged buy-outs can be either friendly or hostile, depending on the negotiations made
A thing for which someone is responsible, especially an amount of money owed.
(LP) An investor in a limited partnership who has no voice in the management of the partnership. LPs have limited liability and usually have priority over GPs upon liquidation of the partnership
finance term; frequently referred to by its acronym, LOC; a mechanism by which a company arranges ongoing short-term borrowing from a bank. A line of credit functions very much as if it were a company's credit card: the bank sets an interest rate for borrowing against the line of credit, an upper credit limit, and rules governing the schedule of repayment.
When a business is bankrupt or terminated, its assets are sold and the proceeds pay creditors. Anything left over is distributed to shareholders. 1) The process of converting securities into cash. 2) The sale of the assets of a company to one or more acquirers in order to pay off debts. In the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock. This is an event that represents the complete or partial closing of a company. In a liquidation event, a company's assets and material goods (securities) are converted into cash and/or distributed for sale to pay off existing corporate debt. Liquidation is the sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale.
the visual representation of your brand; a unique graphical mark or symbol. Some logos incorporate the actual company or product name (e.g., IBM's logo) and/or a tag line, while others are simply easily identifiable symbols, such as McDonald's golden arches.
financial term, abbreviated LCM or LOCOM; valuation convention for portfolio companies used by some venture capital funds and other investors where investments are listed on the books at the lower of either the cost of the original investment or the market value of the investment. Some VCs prefer other valuation methods, since LCM understates fund performance during the life of a fund.
In the context of angel funding and startups, a colloquial term used to describe the loose association of people previously involved with a highly successful technology company, such as Google, Facebook, Paypal or LinkedIn, as founders, early employees or investors
A term utilized to reference small traditional family lifestyle businesses such as local retail and service providers. These businesses are typically operated by family for the benefit of the family without the objective of a liquidation event such as the strategic sale or IPO of the company. As a result, these businesses are not typically funded by angel investment groups or VCs.
Market capitalization refers to the total value of a publicly traded company's outstanding common and preferred shares in the open market. Publicly traded companies are listed on a public stock exchange. The formula for calculating market capitalization is as follows: (Number of common shares x market price) + (number of preferred shares x market price) Only shares that have been authorized and issued are included in the calculation. The market value of a company's shares is often much higher than the "book value" indicated on the company's balance sheet, which states the value when the shares were issued.
the action or business of promoting and selling products or services, including market research and advertising.
A website which enables the facilitation of online in-person meetings of groups with similar interests. Local Meet-ups groups focus on a wide variety of interests, including technology, entrepreneurship, investments and startups from the entrepreneurial world.
A combination of business entities under which efficiency improvements are expected to be achieved from potential synergies by eliminating duplicate factors of production such as plant, equipment and labor and by the more efficient use of capital driving increases in revenues and profits in the resulting company
Mezzanine debts are debts that incorporates equity-based options, such as warrants, with a lower-priority debt. Mezzanine debt is actually closer to equity than debt, in that the debt is usually only of importance in the event of bankruptcy. Mezzanine debt is often used to finance acquisitions and buyouts, where it can be used to prioritize new owners ahead of existing owners in the event that a bankruptcy occurs
In product development, the minimum viable product (MVP) is a product with just enough features to satisfy early customers, and to provide feedback for future development.
A minute book refers to a book kept by the clerk of a court for recording a summary of all the judicial orders in a proceeding. The records are identified by case numbers. It also refers to a record of official actions taken at a meeting of a board of directors or of the stockholders of a corporation.
A mutual fund, or an open-end fund, sells as many shares as investor demand requires. As money flows in, the fund grows. If money flows out of the fund, the number of the fund's outstanding shares drops. Open- end funds are sometimes closed to new investors, but existing investors can still continue to invest money in the fund. In order to sell shares, an investor usually sells the shares back to the fund. If an investor wishes to buy additional shares in a mutual fund, the investor must buy newly issued shares directly from the fund. (See also: Closed-end Funds.)
National treatment is a principle that says countries should treat imported goods, services and intellectual property (trademarks, copyrights and patents) the same way they treat their own. This helps create a level playing field in the marketplace by preventing domestic goods from having an unfair advantage. The national treatment principle applies once the import tariff has been paid and the goods have entered the local market. Members of the World Trade Organization (WTO) follow the principle of national treatment. This means Canadian entrepreneurs can sell goods in WTO member countries and have their products and services compete on a level playing field after all tariffs have been paid.
Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.
An approach used in capital budgeting where the present value of cash inflow is subtracted from the present value of cash outflows. NPV compares the value of a dollar today versus the value of that same dollar in the future after taking inflation and return into account
The net profit margin ratio shows the percentage of sales revenue a company keeps after covering all of its costs including interest and taxes. It is one of five calculations used to measure profitability. The others are: return on shareholders' equity, gross profit margin ratio, return on common equity and return on total assets. Net profit margin is calculated by dividing earnings after taxes (EAT) by net revenue, and multiplying the total by 100%. The higher the ratio, the more cash the company has available to distribute to shareholders or invest in new opportunities. This makes the net profit margin ratio important in helping determine a company's financial health. It is typically used to track a company's performance over time or to compare businesses within the same industry.
Developing business contacts to form business relationships, increase your knowledge, expand your business base, or serve the community. Also used to describe linking computers systems together.
The typical label for any newly organized company, particularly in the context of a leveraged buyout.
Notes payable are long-term liabilities that indicate the money a company owes its financiers - banks and other financial institutions as well as other sources of funds such as friends and family. They are long-term because they are payable beyond 12 months, though usually within five years. Companies may borrow these funds to buy assets such as vehicles, equipment and tools that are likely to be used, amortized and replaced within five years. Some notes payable are secured, which means the creditor has a claim on the borrower's assets if payment terms are not met. If secured, the timeline for repayment could be longer. Notes payable appear under liabilities on the balance sheet, separated into "bank debt" and "other long-term notes payable". Payment details can be found in the notes to the financial statements
A cocktail party one liner is a clear, crisp, engaging sentence which provides potential investors a succinct overview of your startup concept and business model. It challenges the investor to become intrigued by both the implied problem and your proposed solution.
Online marketing (also called Internet marketing or web marketing) is marketing and advertising on the Internet aimed at building awareness about a company's products, services or brand, drive traffic to its website and increase sales. Companies use many different online marketing strategies, including the following: Pay-per-click (PPC) - Paying to have ads appear on search engines like Google when users search on keywords related to a company's products or services. Banner advertising - Paying to place ads on other organizations' websites. Search engine optimization (SEO) - Making sure the company website uses keywords and other techniques to rank highly in search engine results. Content marketing - Publishing online content (e.g., blogs and social media posts) on topics of interest to customers. Email marketing - Emailing promotional business information or offers to prospective or existing customers. Social media marketing - Posting content and advertising on social media platforms such as Facebook, Twitter or LinkedIn to become better known and promote products or services.
Operations refers to all the tasks a company performs to turn raw materials into finished goods or services using its people, processes and equipment. Operations should be designed to ensure goods or services are created: In the right quantity At the desired level of quality On time In the right place At a competitive price If one of these criteria is not met, customers may be dissatisfied and the overall value of the product or service created will decline. For example, if a product is delivered late, its high quality won't be what stands out to the customer. Rather, it will be the lateness of delivery and the customer will judge the product to have a lower value. This is why businesses try to fulfill all five criteria equally.
Organizational culture is generally understood as all of a company's beliefs, values and attitudes, and how these influence the behaviour of its employees. Culture affects how people experience an organization - that is, what it's like for a customer to buy from a company or a supplier to work with it. It shows up in company policies such as dress code and office hours. It also informs things such as workspace design and employee perks. Culture is usually set by a company's leaders. Companies don't tend to define their cultures explicitly; they tend to emerge from what people believe, how they think, what they say and what they do. Culture shapes what behaviour is acceptable or unacceptable. Culture may help define values and core principles that guide organizational behaviour.
Over-the-Counter. A market for securities made up of dealers who may or may not be members of a formal securities exchange. The over-the-counter market is conducted over the telephone and is a negotiated market rather than an auction market such as the NYSE
The amount of common shares of a corporation which are in the hands of investors. It is equal to the amount of issued shares less treasury stock.
Overhead is a general term describing indirect costs - i.e., all costs not directly related to manufacturing a product (cost of goods sold) or acquiring a product for resale (cost of sales). The indirect costs that make up overhead include fixed costs such as rent, "head office" costs, salaries and benefits, and semi-variable costs like fuel and electricity. The total amounts are typically allocated to the profit and loss statements of individual business units as overhead charges. In that context, they are the outside managerial control of business unit managers and hence the word overhead can carry a negative connotation.
he price-earnings ratio (also called PE multiple or P/E) helps shareholders understand what their portion of a company's ownership is worth. The P/E ratio is calculated by dividing the current market price of common shares by the earnings per common share (EPS) for the latest reporting period. Private and smaller businesses sometimes use this ratio as a rule of thumb to value a company. The P/E ratio is only calculated for common shares.
An algorithm which provides a measure of the relative importance of internet web pages and returned search results.
Pari-passu - Latin for "equal footing" - is a financing arrangement that gives multiple lenders equal claim to the assets used to secure a loan. If the borrower is unable to fulfil the payment terms, the assets can be sold, and each lender receives an equal share of the proceeds at the same time. This is different than most agreements involving more than one lender, which typically establish a repayment hierarchy where certain lenders get top priority in terms of payout timing and amounts. The term pari-passu can also be used in other financing contexts where different parties have equal claim or seniority (e.g., wills, trusts, bonds, different share classes).
A nontaxable entity in which each partner shares in the profits, losses, and liabilities of the partnership. Each partner is responsible for the taxes on its share of profits and losses.
Patent protection applies in the country or region that issues the patent. In Canada, a patent lasts for 20 years from the date that it is filed. Patents can have a great deal of value - they can be sold, licensed or used to attract funding from investors. They are long-term assets that generate value for a company over a number of years. In Canada, patent registration is managed by the Canadian Intellectual Property Office (CIPO). To be eligible for patent protection, the invention must be: New - first in the world Useful - functional and operative Inventive - showing ingenuity and not be obvious to someone of average skill who works in the field of the invention.
A presentation in which a startup founder attempts to persuade an investor of the viability of their company. The presentation spectrum varies based on the specific purpose of the pitch. Brief presentations in which an entrepreneur provides a 30 - 60 second overview of their idea, business model and marketing strategy, with the purpose of attaining a followup audience with an investor are described as elevator pitches. Formal, detailed presentations utilizing power point type slide decks, with the specific objective of seeking investment from angel groups or VCs, are known as investment presentation pitches.
A presentation created by entrepreneurs that details the attributes of a startup opportunity in order to help the entrepreneurs communicate it with investors, in their efforts to raise money to fund their venture. The presentation, which typically includes approximately a dozen slides, provides a summary of the startup's business plan, and helps investors determine if they have a continued interest in evaluating the company
to lead (a card of a particular suit), thereby fixing that suit as trump.
Startups and other companies in which an angel group, venture capital fund or private equity firm have invested.
Principal is the amount of money a company borrows when it takes a loan. This amount is recorded on a promissory note as proof of the debt owed. In all but the rarest of situations, the borrower must pay interest, which is the lender's fee for making money available. The interest is calculated on the principal and almost always paid monthly.
A company ownership position that is not listed and cannot be traded on a public securities exchange. Issuance, ownership and exchange of private securities are regulated differently from those of public securities under federal and state law. Equity securities of companies that have not "gone public" (are not listed on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are not listed on an exchange, any investor wishing to sell securities in private companies must find a buyer in the absence of a marketplace. In addition, there are many transfer restrictions on private securities. Investors in private securities generally receive their return through one of three ways: an initial public offering, a sale or merger, or a recapitalization. Private equities are equity securities of unlisted companies. Private equities are generally illiquid and thought of as a long-term investment. Private equity investments are not subject to the same high level of government regulation as stock offerings to the general public. Private equity is also far less liquid than publicly traded stock
A pro forma is a description of financial statements that have one or more assumptions or hypothetical conditions built into the data. A financial projection based on assumptions. Also, refers to a statement of income and balance sheets that exclude non-recurring items.
Procurement is the activity of finding and acquiring goods and services. Its aim is to ensure a company makes and delivers products or services at the right time, right price and best cost so that customers are satisfied and the company makes a profit. Managing the procurement process involves: Preparation - planning and predicting future needs Implementation - shipping, receiving, handling and storing goods Task management - ensuring every employee is doing the right task Follow-up - ensuring expected results and goals are achieved Procurement activities may relate to the acquisition of physical goods or may be information-based (related to ordering, invoicing and the like). Information-based procurement activities are considered administrative.
Product adaptation is the process of changing a product to meet the needs of customers in a market other than the one in which it is made. This can be an important part of a company's strategy for selling in a foreign country. A product might need to be adapted for a variety of reasons including: Complying with foreign laws and regulations - such as labelling requirements Making the product more appealing to a foreign customer base by changing its packaging, size, price or even the entire brand
evidence, typically deriving from an experiment or pilot project, which demonstrates that a design concept, business proposal, etc. is feasible.
A formal written offer to sell securities that provides an investor with the necessary information to make an informed decision. A prospectus explains a proposed or existing business enterprise and must disclose any material risks and information according to the securities laws. A prospectus must be filed with the SEC and be given to all potential investors. Companies offering securities, mutual funds, and offerings of other investment companies including Business Development Companies are required to issue prospectuses describing their history, investment philosophy or objectives, risk factors, and financial statements. Investors should carefully read them prior to investing
A public company is a company whose shares trade on a stock exchange. Typically, public companies have sold shares to the public through an initial public offering (IPO). By going public, a company gains access to equity and debt markets, making it easier to raise capital to fuel growth. At the same time, the company becomes publicly accountable for its operational and financial performance. It must involve shareholders in some corporate governance decisions and follow strict rules of financial reporting. Specifically, a public company has to release financial statements completed according to the International Financial Reporting Standards. Those statements must be verified by independent auditors appointed by the company's board of directors and published on a prescribed schedule.
A financial comparison which examines a specified performance factor for a specified quarter with the same performance factor for the previous quarter. Quarter over Quarter comparisons can can be direct comparing the actual performance factors, or differences between the factors in either absolute or percentage terms.
Quick assets include cash on hand or current assets like accounts receivable that can be converted to cash with minimal or no discounting. Companies tend to use quick assets to cover short-term liabilities as they come up, so rapid conversion into cash (high liquidity) is critical. Inventories and prepaid expenses are not quick assets because they can be difficult to convert to cash, and deep discounts are sometimes needed to do so. Assets categorized as "quick assets" are not labeled as such on the balance sheet; they appear among the other current assets. As current assets, quick assets are typically used, and/or replenished within 45 days.
Refers to a person's emotions and attitudes about using a particular product, system or service. It includes the practical, experiential, affective, meaningful and valuable aspects of human–computer interaction and product ownership.
The process of establishing the value or worth of an asset or a company. Factors impacting company valuation include it's market, management, technology, assets, capital structure and prospective future cash flows
The process by which a company's worth or value is determined. An analyst will look at capital structure, management team, and revenue or potential revenue, among other things.
The financial benefit that a risk-taking activity will bring to the stakeholders of an organization. Value of risk (VOR) requires the organization to determine whether an activity will help to move it closer to completing its objectives
A statement a company utilizes to express why customers should purchase their product or service, as compared to that of a competitor. The objective of the statement is to convince potential customers that their product or service adds more value than that of alternative offerings.
(in marketing) an innovation, service, or feature intended to make a company or product attractive to customers.
Information and data collected by and about a company, its management or its users that serve little purpose beyond internal emotional validation of the company. Such information and data lack the quality and depth to support business decisions.
A public announcement of new hardware or software prior to the products actual development. Often the product is never released and announcements are not rescinded
Venture Capital Limited Partnership is a limited partnership which is formed to invest in small startup businesses with exceptional growth potential
A venture capitalist is a person who invests in a business venture, providing capital for start-up or expansion. An investment from a venture capitalist is a form of equity financing - the VC investor supplies funding in exchange for taking an equity position in the company.
Vesting is the process by which an employee accrues non-forfeitable rights over employer-provided stock incentives or employer contributions made to the employee's qualified retirement plan account or pension plan. Vesting gives an employee rights to employer-provided assets over time, which gives the employee an incentive to perform well and remain with the company. The vesting schedule set up by the company determines when the employee acquires full ownership of the asset.
It is a marketing technique that uses pre-existing social networking services and other technologies to produce increases in brand awareness or to achieve other marketing objectives (such as product sales or marketing buzz) through self-replicating viral processes, analogous to the spread of viruses or computer viruses. It can be delivered by word of mouth or enhanced by the network effects of the Internet and mobile networks.
A type of security that entitles the holder to buy a proportionate amount of common stock or preferred stock at a specified price for a period of years. Warrants are usually issued together with a loan, a bond, or preferred stock and act as sweeteners, to enhance the marketability of the accompanying securities. They are also known as stock-purchase warrants and subscription warrants.
The investor's conversion price is reduced, and thus the number of common shares received on conversion increased, in the case of a down round; it takes into account both: (a) the reduced price and, (b) how many shares (or rights) are issued in the dilutive financing.
In accounting terms, it is the difference between current assets and current liabilities that can be turned into cash. Positive Working Capital means that the company has sufficient liquid assets to cover its short term liabilities (expenses).
The act of changing the value of an asset to an expense or a loss. A write-off is used to reduce or eliminate the value of an asset and reduce profits.
An upward or downward adjustment of the value of an asset for accounting and reporting purposes. These adjustments are estimates and tend to be subjective, although they are usually based on events affecting the investee company or its securities beneficially or detrimentally.
A VC firm that is unable raise a new fund, and thus is unable make investments in new opportunities.
A company which claims to have continuing operations but which demonstrates little or no growth in website visitations or use in recent quarters.
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